date: 27 August 2013
embargo: 00.01hrs Wednesday 28 August 2013
GDP income per head - economic growth that takes account of population change - is still lower today than when the coalition took office, according to new TUC analysis published today (Wednesday).
The TUC analysis shows that the UK's rising population has been the driving force behind economic growth in recent years. GDP per person is still 0.7 per cent lower than when the coalition took office and 7.5 per cent lower than the UK's peak level in late 2007.
The current level of GDP per head is £23,728, just 0.7 per cent higher than at the lowest point of the recession in September 2009.
Economic growth at its current rate (0.7 per cent per quarter) will not be enough to prevent a lost decade of economic stagnation, warns the TUC. If the UK economy continues to grow at this pace, along with annual population growth of 0.8 per cent, it will not return to its pre-recession peak level of GDP per head (£25,652) until early 2018.
The TUC analysis shows that with household incomes falling in real terms and the majority of job creation taking place in low-pay, low-productivity sectors, UK economic growth is being driven by a rising population, rather than increased productivity.
While the government has been keen to talk up the UK's recovery, a series of TUC analyses have questioned the sustainability of current economic growth, particularly as living standards continue to be squeezed.
The analysis of GDP per head follows recent research which showed that rising consumer spending is being driven by a sharp drop in household saving, rather than rising incomes. The TUC is concerned that unless real wages and household incomes start rising again soon, the economy risks creating another personal debt bubble of the sort that helped cause the recent financial crash.
The TUC wants to see ministers do more to promote high quality job creation and fair wages as a way to raise living standards and boost productivity.
TUC General Secretary Frances O'Grady said: 'After years of recession and stagnation, prolonged by painful austerity, the government has been quick to claim we are back in recovery.
'But if the economy continues to grow at its current rate it will still take nearly five more years to get back to where we were in 2007. That doesn't sound like much of a recovery.
'The basis for recent economic green shoots is not encouraging either. Too many people are having to run down their savings or turn to credit cards to spend in the shops, rather than see their incomes grow. And behind improving employment figures are millions of workers whose incomes are falling and who can't get enough hours to make ends meet.
'We all want to see the UK economy back on track but any talk of recovery is meaningless unless we get the right kind of growth. We need economic gains that benefit everyone which can only be achieved with more high quality jobs and decent pay rises to get people's living standards rising again.'
NOTES TO EDITORS:
Actual GDP per head, 2007-13
Date |
GDP per head (£) |
Date |
GDP per capita (£) |
Mar-07 |
25,100 |
Jun-10 |
23,884 |
Jun-07 |
25,380 |
Sep-10 |
23,936 |
Sep-07 |
25,652 |
Dec-10 |
23,844 |
Dec-07 |
25,636 |
Mar-11 |
23,908 |
Mar-08 |
25,632 |
Jun-11 |
23,888 |
Jun-08 |
25,360 |
Sep-11 |
23,980 |
Sep-08 |
24,952 |
Dec-11 |
23,908 |
Dec-08 |
24,376 |
Mar-12 |
23,856 |
Mar-09 |
23,740 |
Jun-12 |
23,688 |
Jun-09 |
23,600 |
Sep-12 |
23,816 |
Sep-09 |
23,552 |
Dec-12 |
23,712 |
Dec-09 |
23,608 |
Mar-13 |
23,728 |
Mar-10 |
23,688 |
Current GDP per capita (Q1 2013), compared to recent peaks and troughs
Peak Q3 2007 |
25,562 |
Trough Q3 2009 |
23,552 |
Gap from Peak to Q1 2013 |
-7.5 per cent |
Gap from Q2 2010 at Q1 2013 |
-0.7 per cent |
Gap from Trough to Q1 2013 |
0.7 per cent |
Source: ONS
- Assuming current population growth of 0.8 per cent per annum, along with current GDP growth of 0.7 per cent per quarter, GDP per capita will not return to the pre-recession peak in Q3 2007 until Q1 2018.
- The TUC's campaign plan can be downloaded from www.tuc.org.uk/campaignplan
- All TUC press releases can be found at www.tuc.org.uk
- Congress 2013 will be held at the Bournemouth International Centre from Sunday 8 September to Wednesday 11 September. Free media passes can be obtained by visiting www.tuc.org.uk/media_credentials and completing an online form. Applications must be in by noon on Wednesday 28 August. Any received later than that will be processed in Bournemouth and will cost £75.
- Follow the TUC on Twitter: @tucnews
Contacts:
Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Alex Rossiter T: 020 7467 1337 M: 07887 572130 E: arossiter@tuc.org.uk
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